Quarterly Returns – Q3 2021

Quarterly return posts supplement my monthly Financial Dashboard, covering investments in detail and looking at my yearly targets. Here I track purchases and sales, document progress against my (in progress) investment strategy, and discuss re-balancing and changes over time.

Finding time over the Christmas break to catch up on these posts, as juggling work and a newborn has turned out to be time intensive. We had planned for around £2100/month of expenses (mortgage, all household bills, all household groceries and toiletries, any other activities as a family). This is proving to be pretty… lean. One of the actions for 2022 will be to re-look at this, as I’m not entirely sure where the cost creep is coming from. We seem to be spending more in supermarkets, and maybe that’s a combination of the inflation of food prices and the endless merry-go-round of visiting relatives requiring feed and water. More likely it’s all the little extra things we’re buying for baby; dummies, toys, books, odd shit you don’t account for like cot sheets and blackout blinds. It feels like these aren’t going away. There’s going to be a continual stream of random ‘essentials’ we ‘need’. Better update my cashflow.

Q3 Returns:

  • Cash Accounts £13,520 (-£340)
  • Investments £11,920 (+£320)
  • Property £52,900 (+£800)
  • Cars £2000 (no changes)

Increased spending on the newborn, and some dips in the market have meant my net worth has fallen back this month, but the savings rate is averaging 37.5%, just under my 40% aim. I continue to target paying off my credit card, aiming to get it paid off by Christmas, while also continuing to put away £250 in cash/month in the Principality Thank You Saver, which is a 1.4% regular saving offering for NHS workers in South Wales (1).

Investments:

Active/Passive Satellite to Core ratio

Core/ Satellite Passive/ Active Split

My 2021 ISA is in Vanguard, and for two of this quarters months I paid in £400/month to my old friend Dev World ex-UK. I also bought some more Ethereum, which I now include in my active satellite % calculation, again as a hedge against inflation/ bond weirdness as outlined last quarter.

As I’m not paying in to Freetrade for this years ISA, all activity in that account has been active attempts at stock picking by selling holdings to buy new (fancy a free share? Sign up to Freetrade using this link, and we both get one). Towards the end of Q2 and into Q3 I sunk around 10% of the value of this account (essentially my GME gains) into some US mortgage brokers, following further meme posts (NYSE:RKT, NYSE:UWMC). These then promptly lost 20%, proving that I am not good at timing my herd following. I also bought back into GME at a price peak, and at the end of Q3 still hold that (small) position, awaiting another price peak.

With all of these positions in play I got annoyed at progress, at the active/passive split and at the general makeup of my portfolio. When I looked over my account (ignoring passive funds) I was holding GME, RKT and UMWC as meme stocks, Unilever (LON:ULVR), Greencoat UK Wind (LON:UKW) and The Renewables Infrastructure Group (LON:TRIG) as sustainable dividend investments, and IQE (LON:IQE) and Coinbase (NASDAQ:COIN) as growth conviction plays. I.E. A bit of a nonsensical mess. I sold a small amount of my passive EM holding (slap wrist) to provide some liquid capital. I then closed my positions in UKW and TRIG. I held these two positions since May 2020, during which time both of their market prices essentially flatlined. That’s kind of what I was expecting; these were essentially investments aligned with my attempt to be more sustainable in general, and were also supposed to be for dividends, not growth. The dividends on these holdings have been the drivers for return, seeing 10% and 11% over the 17 months. I also sold my RKT holding for essentially what I paid for it, and my small IQE position for a healthy 43% loss. This left me with a collection of cash, ULVR and COIN in the positive, and UWMC and GME in the negative awaiting suitable exit points. Where is this portfolio going? Not fully decided yet, so watch this space.

Happy winter everyone,

The Shrink

References:

  1. https://www.principality.co.uk/savings-accounts/everyday-savings-accounts/thank-you-online-saver

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